Why have countries increasingly restricted immigration even when they have opened their markets to foreign competition through trade or allowed their firms to move jobs overseas? In Trading Barriers, Margaret Peters argues that the increased ability of firms to produce anywhere in the world combined with growing international competition due to lowered trade barriers has led to greater limits on immigration. She explores the ideas in her book within the context of the current administration in a new post on the Washington Post Monkey Cage blog.

Immigration and free trade are connected—but they point in opposite directions

Immigration policy often seems a long way off from trade policy, but the two are intimately connected through their impact on U.S. businesses. When trade is restricted, which is what Trump is proposing to do by renegotiating NAFTA and ending KORUS, businesses that rely on a lot of labor will produce more of their goods—and employ more people—here in the United States.

So far, so good for Trump’s promise to bring back manufacturing jobs.

Here’s the big catch: Native labor in the United States is expensive

Increasing the number of jobs for U.S. workers will lead (eventually) to higher wages across the U.S. economy. Businesses may then find that the protection they get from these trade barriers is wiped away by the increase in wages they have to pay — they can’t produce goods at a low-enough price to be competitive.

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